In January $2019,$ Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $$280,000,$ was paid for as follows:

Down payment $$120,000$

Note payable in $4$ equal annual payments starting in January $2020$ $$120,000$

$600$ shares of Cordova preferred stock with a mutually agreed value of $$100$ per share $($par value $$100)$ $$60,000$

Fair rate of interest on the non$-$interest$-$bearing note $10\%$

Required:

$1.$ Determine the cost of the machine. What principle guides the determination of the cost of the machine?

$2.$ Prepare the journal entry to record the acquisition of the machine.

$3.$ Next Level How would your answer change, if at all, if the $$280,000$ cash price were not available?